Commercial Solar Tax Credits

Can Business Owners Take Advantage of Tax Credits?

Want a great way to reduce your business overhead?

Whether you’re a small business owner, or you own a business that is established, chances are you’ve seen residential solar panels installed in your neighborhood or around town and wondered if you could harness solar power for your business as well as your home.

The answer is yes, and in some ways commercial solar panels are an even better idea than residential solar panels because, for the most part, you only need to draw on them during business hours.

Unlike residential solar panels, your usage typically decreases during peak energy consumption hours. You’ll probably be surprised by how much energy and money you save, and the good news is that you can have commercial solar panels installed by experienced professionals if you’re ready to take the next step.

The better news is that you can take advantage of a few tax credits that will make installing solar panels on your business a no-brainer. The first is from the federal government.

The Business Energy Investment Tax Credit

The Business Energy Investment Tax Credit was established in late 2008 and provides substantial tax deductions for the installation of your solar panel system to provide tangible business benefits for installing your solar system, aside from the energy savings you’ll see on your monthly bills.

If your system is installed between now and the last day of 2019 and is a PV, solar water heating, solar process heat system, or a solar space heating/cooling system you are eligible to receive a tax credit for up to 30% of your installation costs. If your system is installed by the end of 2020 you will be eligible for a tax credit of 26% of the system cost, 22% if it is installed by the end of 2021, and 10% if it is installed after that.

In addition, certain geothermal electric systems are also eligible for the tax credit, so if you’ve had one installed be sure to check for that as well.

The Renewable Commercial Energy Systems Credit

In addition to the federal solar tax credit available to business owners, Utah also has a state tax credit that you can claim on your business taxes.

The Renewable Commercial Energy Systems Credit is available for reasonable costs, including installation. In order to claim it for your business, you need to get form TC-40E, Renewable Residential and Commercial Energy Systems Tax Credits, from the Governor’s Office of Energy Development with their certification stamp.

You should not send form TC-40E with your return. Keep the form and all related documents with your records.

The credit is claimed by entering the allowable credit on Utah TC-40A, Part 5, using code 39.

The great news is that you’ll be able to claim this tax credit in addition to your federal tax credit, further compounding your savings.

If you have any additional questions about how to take advantage of commercial solar tax credits or you’re ready to have a commercial system installed at your business, please contact us for more information.